2015-09-13

Yuan Depreciation Stops Reserves to M2 Ratio Deterioration

For several years, the rate of M2 growth has exceeded reserve growth, leading to a decrease in the ratio of reserves to M2. The depreciation of the yuan in August halted this erosion. Due to growth in M2 and a decrease in reserves, however, the amount of yuan in M2 per dollar of reserves continue to rise.